Carbonic anhydrase III (CA3) has been previously reported to have acid phosphatase activity, an observation made by several laboratories (including our own) studying CA3 purified from various species and tissues. Our present investigations of CA3 purified from rat liver and rabbit muscle, as well as the rat enzyme expressed in E. coli., however, do not support an intrinsic phosphatase activity for this enzyme. Rat CA3 was over-expressed in E. coli and purified by ammonium sulfate precipitation and DEAE, Cibachrome Blue, and phenyl-HIC chromatography. Phosphatase activity did not copurify with the recombinant CA3 in the final chromatography step. Also, phosphatase activity in the peak of wild-type CA3 protein falls well short of the reported values for the rabbit and pig muscle protein and slightly higher than that reported for bovine muscle. However, the majority of this activity is likely due to contamination from other, incompletely separated phosphatase peaks. We concluded from these studies that either, (a) expression in E. coli failed to confer an essential post-translational modification essential for phosphatase activity, (b) the active enzyme is a variant with slightly different elution on phenyl-HIC chromatography, (c) the active phosphatase requires a cofactor, which is removed by phenyl-HIC chromatography, or (d) the rat liver enzyme has an intrinsic activity which is even lower than that reported for the bovine muscle protein and was undetected by our methods. To distinguish among these possibilities, we returned to study enzyme purified directly from rat liver. Residual phosphatase activity in rat liver CA3 purified by the above procedure did not co-elute with CA3 on gel filtration. Also, antibodies raised to purified rat liver CA3 are able to precipitate CA3 from the phenyl-HIC-purified preparation but not the phosphatase activity. CA3 was then purified from rabbit muscle using essentially the same procedure as reported in the original studies on the phosphatase activity, and with similar results to those studies. Further purification of this material by high-resolution gel filtration, however, separates at least three contaminating phosphatases with apparent molecular weights of 19, 35, and 40 kDa. Residual phosphatase activity in the peak of CA3 protein was undetectable and far below the values reported in the literature. Care was taken in these studies to account for all of the phosphatase activity--no significant amount was lost suggesting that gel filtration did not remove an essential cofactor from CA3. These results indicate that CA3 has no intrinsic phosphatase activity.